Economic and Business News

For the Week ending, Friday, 21st April, 2017


Chinese firm to build $1.5bn shoe factory in Aba

IN an effort to improve the quality of shoes produced in Aba, Abia State to international standard, Governor Okezie Ikpeazu has secured the interest of a Chinese company which has agreed to set up $1.5 billion shoe industry in Aba.

The company, Huajian Shoe Industry based in Dongguan, Guangzhou, China and Governor Ikpeazu, according to Enyinnaya Appolos, the Governor's spokesman, met and secured the agreement during a meeting with Mr. Zhang Huarong, the Group Chairman of the company, during the recent 1st Nigeria-China Governors Investment Forum.

The Abia-Huajian Shoe Industrial City is expected to produce 5,000 shoes per day and engage about 10,000 people directly and indirectly.

Vanguard. Monday, 17 April 2017


Naira shortage forces banks to boycott CBN dollar sale

Deposit Money Banks lacked naira liquidity to bid for the $100m offered for sale by the Central Bank of Nigeria on Thursday.

Findings showed that banks were unable to buy over $39m out of the $100m offered for bid by the apex bank.

The Nigerian interbank lending rates rose sharply by around 100 percentage points on Thursday, as commercial lenders scrambled for cash to pay for bond purchases and cover their positions.

Overnight lending rates rose to around 300 per cent from 200 per cent at the end of trading on Wednesday, as naira liquidity dried up in the banking system and some banks were forced to borrow from the CBN, Reuters reported

Punch. Monday, 17 April 2017


Nigeria's economic decline affects low-income developing countries - IMF

  • Raises 2017 global growth rate to 3.5%, leaves Nigeria at 0.8%

The International Monetary Fund (IMF), on Tuesday, said the economic downturn in Nigeria impacted negatively on the economies of low-income countries over a period of five years.

This was contained in IMF's Global Financial Report April 2017, released during a media briefing at the ongoing World Bank/IMF Spring Meetings in Washington DC, United States.

"The lion's share of the 1.6 percentage point decline in growth between 2011 and 2016 is attributable to the drastic slowdown in Nigeria, an oil exporter that in 2016 accounted for more than 20 per cent of purchasing-power-parity GDP of low-income countries and about half of the GDP of commodity exporters in this country group," the report stated.

It also said there would be stability of growth in low-income countries that were not primarily commodity exporters, excluding Nigeria.

Nigerian Tribune. Wednesday, 19 April 2017


FG raises panel on new Lagos-Ibadan rail construction

The Federal Government has set up a steering committee to monitor the construction of the new Lagos-Ibadan rail line and ensure the delivery of quality job by the contractor.

The Managing Director, Nigerian Railway Corporation, Mr. Fidet Okhria, who disclosed this on Tuesday in a telephone interview with our correspondent, also said the construction work had commenced on the standard gauge rail line with the demolition of all structures on the NRC's right of way from Apapa, Lagos to Ijoko, Ogun State.

Vice-President Yemi Osinbajo had performed the ground-breaking of the N485bn rail project in Lagos and announced that it would be handled by the China Civil Engineering Construction Corporation and be ready in December 2018.

Punch. Wednesday, 19 April 2017


Nigeria signs off on 120MW solar portfolio

The Federal Government has signed off on two put/call option agreements (PCOA) with solar developers Afrinegia Nigeria Limited and CT Cosmos Nigeria Limited.

The agreement will see Afrinegia Nigeria Limited develop a 50MW PV project, while CT Cosmos will develop a 70MW installation.

Nigeria's Minister of Power Works and Housing, Babatunde Fashola, signed on behalf o0f Nigeria.

The signings, coordinated by the Nigerian Bulk Electricity Trading Plc (NBET), are expected to help finalise a power-purchase agreement that the federal government signed with 14 PV developers during the summer of 2016.

The Sun. Wednesday, 19 April 2017


CBN releases $280m forex to SMEs, BDCs, others

The Central Bank of Nigeria yesterday continued its intervention in the foreign exchange segment of the financial market with the injection of fresh $220 million into the various sectors of the economy.

The CBN, in a statement issued by the Acting Director, Corporate Communications Department, Isaac Okorafor, said it had also commenced the weekly sale of $20,000 to Bureau de Change operators.

The statement said the CBN on Tuesday also opened bids where it offered $100m wholesale 7-45 days forwards to end-users through the deposit money banks (DMBs).

A breakdown of the intervention showed that Basic Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80m, while the Small and Medium Enterprises window received $100m.

The Guardian. Wednesday, 19 April 2017


CBN introduces 'Form X' for SMEs, naira closes at 410/$

The Central Bank of Nigeria has introduced "Form X" for the Small and Medium-scale Enterprises seeking to purchase foreign exchange from the apex bank.

The CBN said the decision was part of its commitment to increase forex liquidity and improve access by the SMEs and retail businesses to forex.

The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, who confirmed this on Monday, said that the measure was intended to ease documentation challenges usually encountered by this category of businesses.

He further explained that the new form, which must be completed by all the SME applicants required the applicant to fill the form with a supporting application letter as well as beneficiary invoice and bank wire transfer.

The objective of the new guideline, he added, was to remove obstacles usually encountered by those whose forex needs for either visibles or invisibles were as small as or less than $10,000.

Punch. Tuesday, 18 April 2017


FG approves new maritime security infrastructure initiative

The Minister of Transportation, Mr Rotimi Amaechi, on Thursday said the Federal Government had approved a new maritime security infrastructure initiative to tackle piracy and sea robbery on Nigerian waterways.

Amaechi disclosed this at the opening ceremony of the 3rd Conference of Association of African Maritime Administrations (AAMA) held in Abuja.

He said that government had taken further steps to facilitate shipping activities to encourage indigenous ship owners to participate in domestic and international shipping trade.

Vanguard. Thursday, 20 April 2017


Ogun State plans massive rice production, as OGUNCCIMA holds trade fair

The Ogun State government says it is embarking on massive production of rice with the aim of selling at affordable price to its residents by the end of the year. The state's Commissioner for Agriculture, Mrs. Ronke Sokefun, who disclosed this in Abeokuta, the state capital, said acres of land were being prepared for massive planting of the rice by farmers.

She spoke at a press conference organised by the state Council of Chambers of Commerce, Industry, Mines and Agriculture (OGUNCCIMA) for the eighth Gateway Trade Fair 2017, scheduled to hold between Wednesday, May 17 and Friday, May 26, 2017 at the M.K.O Abiola Trade Fair Complex, Abeokuta.

The Guardian. Thursday 20 April 2017


Nigeria, U.S. trade hits $1.36b in two months

• Petroleum products dominate transaction

Nigeria's trade with the United States (U.S.) rose by 70.44 per cent from $799.93 million in January and to $1.36 billion in February, according to the latest U.S. Census Bureau data.

Data obtained from the Fact Sheet on Nigeria - U.S. Relations, showed that petroleum products dominated the U.S. import from Nigeria during the period in review. For instance, U.S. crude oil import from Nigeria stood at $936.65 million while gasoline import was $83.43 million.

Petroleum gases, other gaseous hydrocarbons totaled $16.94 million. The previous year, there were no imports in this category. Also, nitrogenous fertilisers totaled $16.66 million, but there were no imports in this category the previous year.

According to the data, through February, 22 Customs districts posted trade surpluses with Nigeria while 13 had deficits. This compares with 25 surpluses and nine deficits for the same period a year ago.

The Guardian. Thursday, 20 April 2017


Nigeria's revenue can’t sustain interest payment on debt - W'Bank

Senior Economist at World Bank office in Nigeria, Yue Man Lee, said this in Abuja on Wednesday on the sideline of the release of the 15th edition of Africa's Pulse, an analysis of issues shaping the continent's economic future.

For the interest payment to be sustainable, according to Lee, the country either has to increase its revenues or work towards balancing the debt profile to make way for more foreign debt rather than allow the continued dominance of local debt with high interest rates.

She said, "Nigeria's debt to GDP ratio is relatively low. What is of concern is the ratio of interest payment to revenue. That is what is concerning. This reflects the fact that there has been a massive drop in revenues because of the drop in oil revenues.

Punch. Thursday, 20 April 2017


World Bank gives $150m credit for mining sector

The World Bank on Wednesday approved 150 million dollars credit to help increase the mining sector’s contribution to the Nigerian economy.

The Senior Communication Officer of the bank, Ms Olufunke Olufon, said in a statement in Abuja that the project would help to establish a strong foundation for mining sector development in the country.

Olufon said that credit would also enhance competitiveness by improving information infrastructure and knowledge of mining.

She said that it would equally help in strengthening key government institutions and foster domestic investments in the sector.

“The project will help develop measures for formalising; regulating and inventorying artisan and small-scale mining; facilitate the flow of mineral transactions and facilitate access to finance.

Nigeriaworld. Thursday, 20 April 2017


Naira Watch: External reserve hit $30.6b as Naira rises by N12 to N385/$

The naira Wednesday appreciated by N12 to N385 against the dollar in the parallel market due to $62 million dollar supply to bureaux de change segment by the Central Bank of Nigeria (CBN).

Vanguard survey revealed that the CBN yesterday sold $20,000 to 3,170 BDCs, amounting to $62 million supply into the segment.

As a result, the parallel market exchange rate dropped from average of N397 per dollar on Tuesday to N385 per dollar at the close of business yesterday.

Confirming this development, Managing Director/Chief Executive, H.J Trust BDC, Mr. Harrison Owoh said: "The appreciation shows the importance of BDCs in the foreign exchange market. Everybody is happy about the appreciation, and we expect it to continue".

Vanguard. Thursday, 20 April 2017


Screening of operations at Lagos airport cargo terminal begins

In a bid to curb illegal activities and eliminate touting at the Hajj and Cargo Terminal area of the Murtala Muhammed Airport (MMA), Lagos, the Federal Airports Authority of Nigeria (FAAN) has set up a task force to commence screening of operations within the terminal.

Following the development, activities at the terminal has now been restricted to 12 hours (7am-7pm) from the initial 24 hours period.

While exit and entrance gates at the terminal would now be opened for commercial activities as from 7am while the gates are locked at 7pm, the new regime would however not affect the operational activities, but commercial activities within the terminal.

Nigerian Tribune. Friday, 21 April 2017


Delta govt signs MoU with developer for N2bn ultra-modern trade fair complex

Delta State Government has signed a Memorandum of Understanding, MoU, with the management of Fazsad Construction Company Limited, for the re-construction and upgrade of the State Ultra-Modern Trade Fair and Exhibition Centre located at Osubi in Okpe Local Government Area of the state.

The deal will cost the developers over N2 billion because of the uniqueness of the trade fair, the various facilities and quality materials to be deployed for the standard expected.

A statement by Executive Assistant on Communication to the Governor of Delta State, Mr Fred Oghenesivbe, said that the project when completed will be one of best trade fair complexes in sub-Sahara Africa with in-built exhibition and multi-purpose halls, toilets, large parking space, conference halls, banking hall, a standard hotel, well equipped health centre, police post, a post office, shops, anchor shops, cinema hall, offices, classy restaurants, entertainment spots, pavilions and other facilities.

Vanguard. Friday, 21 April 2017


We won't kill our people by floating Naira - CBN

  • Vows to deal with banks frustrating SMEs' access to forex

The Central Bank of Nigeria (CBN) has said it would not float the naira despite calls by some people and organizations for the apex bank to float the currency.

Addressing journalists in Washington, on Friday, Mr Isaac Okorafor, Ag. Director of Communications of CBN, said, "Our economy has its own peculiarities, and we cannot kill our people in the name of floating the naira."

According to him, this clarification became imperative following calls in Washington that the naira should be floated.

His words, "Our market is extensively liberalized and the call to float the naira is a bit laughable."

He added, "Yesterday (Thursday), when Madame Lagarde was discussing the economy of Egypt, she lamented the devastating inflation that is in that country. Egypt has half of our population, Egypt receives about $12 billion in foreign earnings and several billions in tourism. We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation."

Nigerian Tribune. Friday, 21 April 2017


Remittances to Nigeria declines by 10% -World Bank

The World Bank, on Thursday, declared that remittances to Nigeria fell by 10 per cent in 2016.

This, according to the bank, would be the second consecutive decline in remittances to the country, a trend contrary to what had happened in the last three decades.

However, Nigeria was not the only country affected by the development, as nearly all developing countries recorded a slide in remittances to them from their nationals in developed countries.

These were contained in the latest edition of the Migration and Development Brief, released on Thursday by the World Bank Group, during the World Bank/IMF spring meetings.

According to the World Bank, the decline in remittances was precipitated by low oil prices and slow growth in developed economies.

Nigerian Tribune. Friday, 21 April 2017.

Other Economic and Business Indicators

GDP -1.30%
(Q4, 2016)
Inflation Rate
(Year-on-Year change)
(March, 2017)
Unemployment Rate 13.9%
(Q3, 2016)
Underemployment Rate 19.7%
(Q3, 2016)
Monetary Policy Rate 14%
(March, 2017)
Inter-Bank Call Rate 10.39%
(December, 2016)
Prime Lending Rate 17.09%
(December, 2016)
Maximum Lending Rate 28.55%
(December, 2016)
External Reserve USD 30,585,796,013     
(19 April, 2017)
Exchange Rate (CBN)
19 April 2017
USD: 306.00
POUNDS: 393.49
EUROS: 328.09
Exchange Rate (Parallel Market)
19 April 2017
USD: 400.00
POUNDS: 500.00
EUROS: 425.00
Liquidity Ratio 30%
Treasury Bill Rate (91 Days) 13.55%
(5 April, 2017)
Currency in Circulation (Million Naira) 2,179,174
(December, 2016)
Banks Reserves(Million Naira) 3,318,344.71
(December, 2016)
External Debt - FGN + States (USD million) 11,261.89
(as at June 30, 2016)
Local Debt - FGN only (NGN million) 10,606,334.22
(as at June 30, 2016)
Bank Credit to to Private Sector (NGN million) 22,374,718.08
(December, 2016)
Demand Deposits at Banks (NGN million) 9,699,750.76
(December, 2016)
Nigeria's Merchandise Trade 4,721.9 billion (Quarter 3, 2016)
Crude Oil $49.99 (OPEC Daily Basket, April 21, 2017)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
24 April, 2017